Is Google Ready to Enter Into a Price War With the Likes of Apple?

 
 
By Don Reisinger  |  Posted 2012-02-14 Email Print this article Print
 
 
 
 
 
 
 


 

5. The investment is too high

Although investing in a new operating system is expensive, it€™s no match for the research and development and production costs that go into hardware. Hardware is extremely expensive to produce, and in far too many cases, delivers small margins. It€™s best for Google to stick with high-margin businesses and let Apple try to make profits on expensive equipment.

6. A price war Google can€™t win

Following that, Google should be ready to enter into a price war with Apple if it ever decides to try hardware. Apple will press the envelope on design and features, forcing Google to catch up. Meanwhile, the iPhone maker€™s margins will stay strong. Plus, Apple can dump billions of dollars into research and development without even thinking twice about it. Getting into a price war with Apple is something the search giant just won€™t want to do.

7. Too many competitors

Right now, Google is doing well in markets where it has little competition. In search, its only real concern is Microsoft, and Bing has little market share. In the OS space, Android is the only suitable choice for any vendor not named Apple. In the advertising market, Google is pretty much the only company that matters. But in hardware, the company would be facing off with a slew of competitors. And there€™s no telling if its devices will shine or get lost amid all the others.

8. The Sony model is dangerous

The latest rumors surrounding Google seem to suggest that the company is trying to become more and more like Sony and get into every market that it can. It€™s a bad idea. Sony today is floundering because it took too many risks and tried to do too much. There€™s something to be said for sticking with core competencies. And for Google, that means search, advertising, and Android€”not tablets, smartphones, and home-entertainment devices.

9. Home entertainment issues are enough to make trouble

What makes Google think that it can be successful developing a home entertainment device? The company is trying to appeal to consumers in the living room with Google TV, and so far, it€™s failing. Delivering a device that will likely work with Google TV won€™t change the fact that the entertainment platform falls short on many levels, including content support.

10. It all comes back to advertising

When it€™s all said and done, Google does everything to enhance its advertising initiatives. What€™s not clear is how advertising will play into its decision to get into hardware. Chances are, its ads will be running on the software included in its hardware products. But how will consumers respond to that? Hardware and advertising don€™t necessarily play nice with each other€”and Google should accept that.

Follow Don Reisinger on Twitter by clicking here



 
 
 
 
Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Gearlog.com. Since then, he has written extremely popular columns for CNET.com, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.
 
 
 
 
 
 
 

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